The Federal Trade Commission expects influencer marketing to be a $15 billion industry by 2022, according to Jeni Lamb Rogers, partner at PSL Law Group, LLC, who spoke during an SFA Regulatory Update webinar, Thursday.
Because consumers tend to trust the opinions of people who look, think, and act like them (or what they aspire to), influencer reviews have become a particularly effective way to promote products, especially in the specialty food industry, she noted. But there are strict FTC guidelines around influencers and endorsements that companies must comply with to ensure they are not at risk.
FTC Guideline Basics
In the FTC’s eyes, an influencer’s endorsement is the same as a consumer testimonial, meaning it must comply with the same standards, shared Rogers. The endorser of a product must have actually tried it, as well as been honest in their review of it. The influencer cannot make claims about the product that would require substantiation that the company doesn’t have, such as health or environmental benefit claims.
In addition, endorsers must disclose connections to the advertiser, whether they are receiving a product discount, free product, or are being paid to review the product or per post or video. They must also disclose if they are doing a paid social media “takeover,” said Rogers.
Any employment, personal, and/or family relationships must also be disclosed.
Disclosure Dos and Don’ts
Appropriate disclosures on a social media post include language like “thanks [brand name] for the free product!” or banners that say “advertisement” or “sponsored content.” According to Rogers, on a space limited platform, it can also be okay for the influencer to say that they are a “[brand name] ambassador.”
For video, it’s important that the influencer repeat a few times that they got the product for free or are being paid to post about it. Continuous banners with “advertisement,” “ad,” “sponsored,” or “sponsored content” are also encouraged, said Rogers.
In either a text/image post or video, disclosures in another language do not meet the FTC guidelines. Rogers noted that other disclosure don’ts include incomplete phrases like “Sp,” “spon,” “collab,” or “ambassador” and limiting the language to just the "about me" section of the social media profile.
Protecting Yourself
One of the best ways to protect yourself is to have a written contract with all of your influencers, said Rogers. The contract should outline how much they are being paid and when, who gets the rights to the material after production, the required disclosures in social media posts, and the claims the influencer can and cannot make about your product. Rogers notes that these contracts should also be reviewed by an appropriate attorney or in-house compliance department. You should also have contracts with family and personal contacts if they are endorsing your products, she said.
If employees are posting endorsements on their personal social media accounts, you will need a written policy, training, and a monitoring program for these posts, said Rogers.
Related: What You Should Know About Vanilla Flavor Litigation; Ensuring Compliant Online Advertising.